Common Questions About EIN Tax Numbers

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If you’re considering joining the estimated 33.2 million small U.S. businesses by launching a company, there are several steps you’ll need to take when forming the entity. One task you’ll likely need to handle is getting an employer identification number (EIN).

Some aspiring small business owners may have questions about EINs, including whether having one is necessary, what it’s used for, and what to do if you forget the one associated with your business. If you’re among them, here’s what you need to know.

Do All Businesses Need an EIN?

While having an EIN is recommended for nearly any type of company – it allows you to better separate business and personal activities – it isn’t required in all cases. For example, a sole proprietorship without any employees may not need an EIN.

However, there are many situations in which having an EIN is required. For instance, if you have employees, you’ll need an EIN regardless of your business entity type. Additionally, corporations and partnerships need an EIN even if there aren’t employees. The same is true of any business that files employment, excise, or alcohol, tobacco, and firearms tax returns or that plans to offer a solo 401(k) or Keogh plan. 

There are other situations in which an EIN is potentially a must. For example, some financial institutions require EINs for opening business accounts regardless of whether the person is operating a sole proprietorship. In some cases, states make EINs mandatory for business licenses and permits, too. As a result, an EIN is typically recommended for all types of business entities.

Additionally, an EIN provides some extra protections. For example, it may limit your need to expose your Social Security Number (SSN), which could reduce your odds of identity theft. It simplifies the process of hiring employees down the road, too, which is potentially helpful if your business might grow.

What Can I Do With My Business’ EIN?

Once you have an EIN, you can use it for a variety of business-related financial activities. One of the most common uses is for filing federal taxes or making tax-related payments. Additionally, you can use the EIN when you file for any required licenses or permits.

An EIN is also required when opening business bank accounts in many cases. Additionally, most lenders require an EIN if you’re applying for a business loan.

What Should I Do If I Forget My Business’ EIN?

If you lose your company’s EIN, you have a few options. First, you can look for the notice that was initially issued by the IRS when your application was processed. Second, you can look at past tax filings if you previously submitted a return, as these would contain your EIN.

In some cases, you can contact the financial institution that has your business bank account and see if they’ll provide your EIN. Additionally, any state filings for licenses and operating permits likely have your EIN, so you can review the related documents.

Finally, if you can’t track down your EIN, you can call the IRS Business & Specialty Tax line. The representative will ask questions to confirm your identity and can provide your EIN if you’re listed as an authorized person.